As an employee, if you have other income, you are entitled to tax deductions. However, you are only entitled to deductions in respect of expenses that are not associated with the income taxable under the special tax scheme. You are, for example, entitled to deductions for contributions to privately established Danish pension schemes, certain foreign pension schemes or contributions to an unemployment fund.

If you are taxed according to this special tax scheme, any net interest expenses etc. are only deductible to the extent that you have income which is taxed according to the normal tax rules. If, during the year, you stop being taxed according to the special scheme, the interest expenses will be deductible on an accrual basis.

Deficit from non-business activities

During the years in which you use the scheme, you cannot carry forward any non-commercial deficits for offsetting in years of taxation in which you are no longer taxed under the scheme. This applies to for example interest on loans in real property.

You cannot forward non-business losses to your spouse. Nor may your spouse carry forward any losses which you are not allowed to carry forward yourself.

Personal allowance

When calculating the tax payable on other income, you will also be entitled to a personal allowance. The personal allowance amounts to DKK 46,000 in 2018. Any unused portion of your personal allowance cannot be transferred to your spouse. Nor can any unused portion of your spouse's tax-free allowance for positive net income from capital used in the calculation of his or her top-bracket tax be transferred to you.

If you are subject to limited tax liability or if you are fully tax liable and a resident abroad in accordance with a double taxation treaty, you are only entitled to deduction for expenses associated with income which is taxable in Denmark according to the treaty with the country in question.

On certain conditions, however, you may use the cross-border worker rules (Section 5 A-5 D of the Danish Withholding Tax Act (Kildeskatteloven)) together with the special tax scheme. According to these rules, you are entitled to deduction for certain expenditure incurred in connection with family and personal circumstances to which normally only persons with full tax liability who are resident in Denmark are entitled. The rules are described in section C.F.6. of the legal guide. Please note that the guide is only available in Danish.